The battle lines of an intellectual property war are becoming clearer two years after Audience Partners threw down an industry marker with a 27-point patent of their cookie-voter file matching process.
At the time, rivals called it the equivalent of “patenting a strategy.” But now the founders of several poli-tech startups are following suit. Several heads of new firms told C&E they’ve pursued patent protection despite business method and software patents facing greater scrutiny from the U.S. Patent and Trademark Office.
These moves fit a pattern, established by Audience Partners, of pursuing patents of processes that most people in the industry believe can’t be patented. Moreover, they’re coming in wake of Alice Corp. v. CLS Bank International, the June 2014 Supreme Court ruling that seemed to tighten eligibility while invalidating some software and business-method patents. In fact, the Software Freedom Law Center, which represents not-for-profit developers, said at the time that the decision was “one more step towards the abolition of patents on software inventions.”
Now, that ruling seemed to cool some enthusiasm for patenting — at least in the consulting industry, according to Brian Pandya, a patent attorney at Washington-based Wiley Rein LLP.
“With the change in law, patents that looked valuable two years ago may be valueless today,” Pandya told C&E. “Many companies will do it because of investor demands, or projecting to the industry that they’re a legitimate company. But there are questions about their ongoing validity.”
For Walter Kawecki, co-Founder and CEO VoterLabs, the decision to patent the company’s text-to-donate platform was meant to protect the investment of time and money he and his partners put into their four-year-old polit-tech startup.
“When I found out patent protection might be available that made a difference with us pursuing this as hard as we did. Some company like Google can’t just swoop in,” Kawecki said. “It allowed me to feel confident throwing all of our resources into this company.”
Kawecki filed the company’s provisional patent application in November 2012. It was granted two years later for a text-to-donate system that “identifies people contributing or opting-in and delivers complex data sets including demographic, financial, household and voter file data on each individual for microtargeting, modeling and analysis,” according to a release.
“I don’t think that the people who are patent shy understand the patent system very well,” said Kawecki. “Or they don’t like it because of the protection it might offer other people.”
Part of what’s deterred other entrepreneurial consultants from patenting their systems is the cost and effort that goes into the process, which isn’t guaranteed to be successful.
“It depends on what you have. If you have sophisticated proprietary algorithms, you might want to do that,” said Justin Gargiulo, CEO and founder of VoterTrove, a Republican data-services company. “But you can invest a ton of money and go down a long road, and have nothing to show for it. In most cases, I don’t believe it’s really necessary.”
Gargiulo opted not to file patent applications on his firm’s technology. But Kendall Tucker, co-founder and CEO of Polis, a poli-tech startup that makes an organizing and canvassing app, filed a provisional patent after the firm launched.
Meanwhile, Bryan Fratkin, who launched Whistle Stop Digital last year, said his firm copyrighted all screens and code within its application. But it held back from filing a patent application because of concern about the Alice ruling.
“With the current state of things, in submitting the patent app we'd be giving away the ‘secret sauce,’” he wrote in an email. “Whether awarded the patent or not, that information would be in the public record, accessible to our competitors and others.”
Meanwhile, Audience Partners, which fired what many considered the first shot in the industry’s IP war, has continued its patenting effort. It was granted a second patent in 2015 and has a number of applications pending, according to Jordan Lieberman, president of the CampaignGrid division of Audience Partners.
That worries Gargiulo, in part, because Audience Partners’ strategy could be a model for other firms. “That’s not good for the industry,” he said, noting the belief among Silicon Valley-types that patents stifle innovation.
But as the industry becomes more data driven and moves beyond old-school technology like phones, mail, and TV, patents are likely to become more sought-after — regardless of the regulatory environment, according to Pandya, who counsels tech companies. “It’s a costly process and it’s time consuming. But as we go to more data applications, that is technology that can be patented and protected.”
Moreover, patenting could be a way for a firm to expand its reach beyond the campaign industry. In fact, Kawecki said that’s what he has planned for his company.
“This isn’t about political campaigns per se,” he said. “This is about technology and innovation.”